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LOANS, ALLOWANCE FOR CREDIT LOSSES, AND CREDIT QUALITY | 9 Months Ended
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Sep. 30, 2023
LOANS, ALLOWANCE FOR CREDIT LOSSES, AND CREDIT QUALITY |
LOANS, ALLOWANCE FOR LOAN LOSSES, AND CREDIT QUALITY | NOTE 5 – LOANS, ALLOWANCE FOR CREDIT LOSSES, AND CREDIT QUALITY The following table presents total loans by portfolio segment and class of loan as of September 30, 2023 and December 31, 2022: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | 2023 |  | 2022
Commercial/industrial | ​ | $ | 531,906 | ​ | $ | 492,563
Commercial real estate - owner occupied | ​ |  | 898,141 | ​ |  | 717,401
Commercial real estate - non-owner occupied | ​ |  | 785,400 | ​ |  | 681,783
Construction and development | ​ |  | 197,927 | ​ |  | 200,022
Residential 1‑4 family | ​ |  | 878,860 | ​ |  | 739,339
Consumer | ​ |  | 50,527 | ​ |  | 44,796
Other | ​ |  | 14,821 | ​ |  | 18,905
Subtotals | ​ |  | 3,357,582 | ​ |  | 2,894,809
ACL - Loans | ​ |  | (43,404) | ​ |  | (22,680)
Loans, net of ACL - Loans | ​ |  | 3,314,178 | ​ |  | 2,872,129
Deferred loan fees, net | ​ |  | (2,033) | ​ |  | (831)
Loans, net | ​ | $ | 3,312,145 | ​ | $ | 2,871,298
​ The ACL - Loans is based on the Company’s evaluation of historical default and loss experience, current and projected economic conditions, asset quality trends, known and inherent risks in the portfolio, adverse situations that may affect the borrowers’ ability to repay a loan, the estimated value of any underlying collateral, composition of the loan portfolio and other relevant factors. Loans with similar risk characteristics are evaluated in pools and, depending on the nature of each identified pool, the Company utilizes a discounted cash flow (“DCF”), probability of default / loss given default (“PD/LGD”) or remaining life method. The historical loss experience estimate by pool is then adjusted by forecast factors that are quantitatively related to the Company’s historical credit loss experience, such as national unemployment rates, gross domestic product and indexes which are indicative of the value of underlying collateral. Losses are forecasted over the expected life of the loan, first by predicting over a period of time determined to be reasonable and supportable (currently four calendar quarters), and at the end of the reasonable and supportable period reverting to long term historical averages. The reasonable and supportable period and reversion period are re-evaluated each quarter by the Company and are dependent on the current economic environment among other factors. The expected credit losses for each loan pool are then adjusted for changes in qualitative factors not inherently considered in the quantitative analyses. The qualitative adjustments either increase or decrease the quantitative model estimation. The Company considers factors that are relevant within the qualitative framework which include the following: lending policy, changes in nature and volume of loans, staff experience, changes in volume and trends of problem loans, concentration risk, trends in underlying collateral values, external factors, quality of loan review system and other economic conditions. Expected credit losses for loans that no longer share similar risk characteristics with the collectively evaluated pools are excluded from the collective evaluation and estimated on an individual basis. Individual evaluations are performed for nonaccrual loans, loans rated substandard, and modified loans (previously classified as TDRs). Specific allocations of the ACL for credit losses on individually evaluated loans are estimated on one of several methods, including the estimated fair value of the underlying collateral, observable market value of similar debt or the present value of expected cash flows. A summary of the activity in the ACL - Loans by loan type for the nine-months ended September 30, 2023 is summarized as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ | ​ |  | Commercial |  | Commercial |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​
​ | ​ | ​ | ​ | ​ | Real Estate - | ​ | Real Estate  - | ​ | Construction | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Commercial / | ​ | Owner | ​ | Non - Owner | ​ | and | ​ | Residential | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Industrial | ​ | Occupied | ​ | Occupied | ​ | Development | ​ | 1-4 Family | ​ | Consumer | ​ | Other | ​ | Total
ACL - Loans - January 1, 2023 | ​ | $ | 4,071 | ​ | $ | 5,204 | ​ | $ | 5,405 | ​ | $ | 1,592 | ​ | $ | 5,944 | ​ | $ | 314 | ​ | $ | 150 | ​ | $ | 22,680
Adoption of CECL | ​ | ​ | 1,859 | ​ | ​ | 1,982 | ​ | ​ | 1,914 | ​ | ​ | 2,063 | ​ | ​ | 2,567 | ​ | ​ | 620 | ​ | ​ | (33) | ​ | ​ | 10,972
ACL - Loans on PCD loans acquired | ​ | ​ | 1,082 | ​ | ​ | 4,424 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 28 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 5,534
Charge-offs | ​ |  | — | ​ | ​ | — | ​ | ​ | — | ​ |  | — | ​ |  | — | ​ |  | (1) | ​ |  | (69) | ​ |  | (70)
Recoveries | ​ |  | 5 | ​ | ​ | 70 | ​ | ​ | — | ​ |  | — | ​ |  | 104 | ​ |  | 4 | ​ |  | 13 | ​ |  | 196
Provision | ​ |  | 538 | ​ | ​ | (220) | ​ | ​ | 1,245 | ​ |  | (87) | ​ |  | 2,509 | ​ |  | 70 | ​ |  | 37 | ​ |  | 4,092
ACL - Loans - September 30, 2023 | ​ | $ | 7,555 | ​ | $ | 11,460 | ​ | $ | 8,564 | ​ | $ | 3,568 | ​ | $ | 11,152 | ​ | $ | 1,007 | ​ | $ | 98 | ​ | $ | 43,404
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ A summary of the activity in the allowance for loan losses (“ALL”) by loan type for the nine-months ended September 30, 2022 is as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ | ​ |  | Commercial |  | Commercial |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​
​ | ​ | ​ | ​ | ​ | Real Estate - | ​ | Real Estate - | ​ | Construction | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Commercial / | ​ | Owner | ​ | Non - Owner | ​ | and | ​ | Residential | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Industrial | ​ | Occupied | ​ | Occupied | ​ | Development | ​ | 1-4 Family | ​ | Consumer | ​ | Other | ​ | Total
ALL - January 1, 2022 | ​ | $ | 3,699 | ​ | $ | 5,633 | ​ | $ | 5,151 | ​ | $ | 984 | ​ | $ | 4,445 | ​ | $ | 224 | ​ | $ | 179 | ​ | $ | 20,315
Charge-offs | ​ |  | — | ​ | ​ | — | ​ | ​ | — | ​ |  | — | ​ |  | (39) | ​ |  | (17) | ​ |  | (27) | ​ |  | (83)
Recoveries | ​ |  | 455 | ​ | ​ | 74 | ​ | ​ | 360 | ​ |  | 152 | ​ |  | 6 | ​ |  | 2 | ​ |  | 64 | ​ |  | 1,113
Provision | ​ |  | 134 | ​ | ​ | (643) | ​ | ​ | 365 | ​ |  | 507 | ​ |  | 1,312 | ​ |  | 90 | ​ |  | (65) | ​ |  | 1,700
ALL September 30, 2022 | ​ |  | 4,288 | ​ | ​ | 5,064 | ​ | ​ | 5,876 | ​ |  | 1,643 | ​ |  | 5,724 | ​ |  | 299 | ​ |  | 151 | ​ |  | 23,045
ALL ending balance individually evaluated for impairment | ​ |  | 150 | ​ | ​ | — | ​ | ​ | 775 | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 925
ALL ending balance collectively evaluated for impairment | ​ | $ | 4,138 | ​ | $ | 5,064 | ​ | $ | 5,101 | ​ | $ | 1,643 | ​ | $ | 5,724 | ​ | $ | 299 | ​ | $ | 151 | ​ | $ | 22,120
Loans outstanding - September 30, 2022 | ​ | $ | 486,839 | ​ | $ | 723,964 | ​ | $ | 668,505 | ​ | $ | 209,619 | ​ | $ | 706,794 | ​ | $ | 43,953 | ​ | $ | 19,178 | ​ | $ | 2,858,852
Loans ending balance individually evaluated for impairment | ​ |  | 487 | ​ | ​ | 2,541 | ​ | ​ | 1,396 | ​ |  | — | ​ |  | 211 | ​ |  | — | ​ |  | — | ​ |  | 4,635
Loans ending balance collectively evaluated for impairment | ​ | $ | 486,352 | ​ | $ | 721,423 | ​ | $ | 667,109 | ​ | $ | 209,619 | ​ | $ | 706,583 | ​ | $ | 43,953 | ​ | $ | 19,178 | ​ | $ | 2,854,217
​ In addition to the ACL-Loans, the Company has established an ACL-Unfunded Commitments, classified in other liabilities on the consolidated balance sheets. This allowance is maintained to absorb losses arising from unfunded loan commitments, and is determined quarterly based on methodology similar to the methodology for determining the ACL-Loans. The ACL - Unfunded Commitments was $3.5 million at September 30, 2023. See Note 10 for further information on commitments. The provision for credit losses is determined by the Company as the amount to be added to the ACL loss accounts for various types of financial instruments including loans, investment securities, and off-balance sheet credit exposures after net charge-offs have been deducted to bring the ACL to a level that, in management’s judgment, is necessary to absorb expected credit losses over the lives of the respective financial instruments. The following table presents the components of the provision for credit losses. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended | ​ | Year Ended
​ | ​ | September 30, 2023 | ​ | September 30, 2022 | ​ | December 31, 2022
Provision for credit losses on: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Loans | ​ | $ | 4,092 | ​ | $ | 1,700 | ​ | $ | 2,200
Unfunded Commitments | ​ | ​ | 90 | ​ | ​ | — | ​ | ​ | —
Total provision for credit losses | ​ | $ | 4,182 | ​ | $ | 1,700 | ​ | $ | 2,200
​ The Company’s past due and non-accrual loans as of September 30, 2023 is summarized as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ | ​ |  | 90 Days |  | ​ | ​ | ​ | ​ | ​ |  | Non-Accrual
​ | ​ | 30-89 Days | ​ | or more | ​ | ​ | ​ | ​ | ​ | ​ | ​ | with no
​ | ​ | Past Due | ​ | Past Due | ​ | Non- | ​ | ​ | ​ | ​ | specifically
​ | ​ | Accruing | ​ | and Accruing | ​ | Accrual | ​ | Total | ​ | allocated ACL
Commercial/industrial | ​ | $ | 78 | ​ | $ | 18 | ​ | $ | 531 | ​ | $ | 627 | ​ | $ | 47
Commercial real estate - owner occupied | ​ |  | 180 | ​ |  | 250 | ​ |  | 1,958 | ​ |  | 2,388 | ​ |  | 1,958
Commercial real estate - non-owner occupied | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Construction and development | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Residential 1‑4 family | ​ |  | 843 | ​ |  | 151 | ​ |  | 444 | ​ |  | 1,438 | ​ |  | 445
Consumer | ​ |  | 76 | ​ |  | 27 | ​ |  | 13 | ​ |  | 116 | ​ |  | 13
Other | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
​ | ​ | $ | 1,177 | ​ | $ | 446 | ​ | $ | 2,946 | ​ | $ | 4,569 | ​ | $ | 2,463
​ The Company’s past due and non-accrual loans as of December 31, 2022 is summarized as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ | ​ |  | 90 Days |  | ​ | ​ | ​ | ​ | ​ |  | ​ | ​
​ | ​ | 30-89 Days | ​ | or more | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Past Due | ​ | Past Due | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Accruing | ​ | and Accruing | ​ | Non-Accrual | ​ | Total | ​ | ​
Commercial/industrial | ​ | $ | 192 | ​ | $ | — | ​ | $ | 418 | ​ | $ | 610 | ​ | ​ | ​
Commercial real estate - owner occupied | ​ |  | 1,301 | ​ |  | — | ​ |  | 2,688 | ​ |  | 3,989 | ​ | ​ | ​
Commercial real estate - non-owner occupied | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ | ​ | ​
Construction and development | ​ |  | 237 | ​ |  | — | ​ |  | 17 | ​ |  | 254 | ​ | ​ | ​
Residential 1‑4 family | ​ |  | 774 | ​ |  | 268 | ​ |  | 505 | ​ |  | 1,547 | ​ | ​ | ​
Consumer | ​ |  | 19 | ​ |  | 5 | ​ |  | — | ​ |  | 24 | ​ | ​ | ​
Other | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ | ​ | ​
​ | ​ | $ | 2,523 | ​ | $ | 273 | ​ | $ | 3,628 | ​ | $ | 6,424 | ​ | ​ | ​
​ Interest recognized on non-accrual loans is considered immaterial to the consolidated financial statements for the nine months ended September 30, 2023 and 2022. ​ A loan is considered to be collateral dependent when, based upon management’s assessment, the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. For collateral dependent loans, expected credit losses are based on the estimated fair value of the collateral at the balance sheet date, with consideration for estimated selling costs if satisfaction of the loan depends on the sale of the collateral. The following table presents collateral dependent loans by portfolio segment and collateral type, including those loans with and without a related allowance allocation. A significant portion of the loan balances in this table and essentially all of the allowance allocations relate to PCD loans which were acquired from Hometown. Real estate collateral primarily consists of operating facilities of the underlying borrowers. Other business assets collateral primarily consists of receivables and inventory of the underlying borrowers. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Collateral Type | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
As of September 30, 2023 | ​ | ​ | ​ | ​ | Other | ​ | ​ | ​ | ​ | Without an | ​ | With an | ​ | Allowance
​ | ​ | Real Estate | ​ | Business Assets | ​ | Total | ​ | Allowance | ​ | Allowance | ​ | Allocation
Commercial/industrial | ​ | $ | — | ​ | $ | 5,719 | ​ | $ | 5,719 | ​ | $ | 47 | ​ | $ | 5,672 | ​ | $ | 1,919
Commercial real estate - owner occupied | ​ |  | 9,699 | ​ |  | — | ​ |  | 9,699 | ​ |  | 1,590 | ​ |  | 8,109 | ​ |  | 2,854
Commercial real estate - non-owner occupied | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Construction and development | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Residential 1‑4 family | ​ |  | 35 | ​ |  | — | ​ |  | 35 | ​ |  | 35 | ​ |  | — | ​ |  | —
Consumer | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Other | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Total Loans | ​ | $ | 9,734 | ​ | $ | 5,719 | ​ | $ | 15,453 | ​ | $ | 1,672 | ​ | $ | 13,781 | ​ | $ | 4,773
​ Prior to the adoption of ASU 2016-13, the allowance included specific reserves for certain individually evaluated impaired loans. Specific reserves reflected estimated losses on impaired loans from management’s analysis developed through specific credit allocations. The following table shows a summary of impaired loans individually evaluated as of December 31, 2022: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ | ​ |  | Commercial |  | Commercial |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​
​ | ​ | ​ | ​ | ​ | Real Estate - | ​ | Real Estate - | ​ | Construction | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Commercial/ | ​ | Owner | ​ | Non - Owner | ​ | and | ​ | Residential | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Industrial | ​ | Occupied | ​ | Occupied | ​ | Development | ​ | 1‑4 Family | ​ | Consumer | ​ | Other | ​ | Total
With an allowance recorded: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  | ​ | ​ |
Recorded investment | ​ | $ | — | ​ | $ | — | ​ | $ | 18 | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | 18
Unpaid principal balance | ​ |  | — | ​ |  | — | ​ |  | 18 | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 18
Related allowance | ​ |  | — | ​ |  | — | ​ |  | 8 | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 8
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
With no related allowance recorded: | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  |  | ​ |  | ​ | ​ |  |  | ​ |  |  | ​ |  | ​
Recorded investment | ​ | $ | 284 | ​ | $ | 2,487 | ​ | $ | 497 | ​ | $ | — | ​ | $ | 200 | ​ | $ | — | ​ | $ | — | ​ | $ | 3,468
Unpaid principal balance | ​ |  | 284 | ​ |  | 2,487 | ​ |  | 497 | ​ |  | — | ​ |  | 200 | ​ |  | — | ​ |  | — | ​ |  | 3,468
Related allowance | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total: | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  |  | ​ |  | ​ | ​ |  |  | ​ |  |  | ​ |  | ​
Recorded investment | ​ | $ | 284 | ​ | $ | 2,487 | ​ | $ | 515 | ​ | $ | — | ​ | $ | 200 | ​ | $ | — | ​ | $ | — | ​ | $ | 3,486
Unpaid principal balance | ​ |  | 284 | ​ |  | 2,487 | ​ |  | 515 | ​ |  | — | ​ |  | 200 | ​ |  | — | ​ |  | — | ​ |  | 3,486
Related allowance | ​ |  | — | ​ |  | — | ​ |  | 8 | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 8
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Average recorded investment | ​ | $ | 361 | ​ | $ | 3,726 | ​ | $ | 1,017 | ​ | $ | — | ​ | $ | 237 | ​ | $ | — | ​ | $ | — | ​ | $ | 5,341
​ The Company utilizes a numerical risk rating system for commercial relationships. All other types of relationships (ex: residential, consumer, other) are assigned a “Pass” rating, unless they have fallen 90 days past due or more, at which time they receive a rating of 7. The Company uses split ratings for government guaranties on loans. The portion of a loan that is supported by a government guaranty is included with other Pass credits. The determination of a commercial loan risk rating begins with completion of a matrix, which assigns scores based on the strength of the borrower’s debt service coverage, collateral coverage, balance sheet leverage, industry outlook, and customer concentration. A weighted average is taken of these individual scores to arrive at the overall rating. This rating is subject to adjustment by the loan officer based on facts and circumstances pertaining to the borrower. Risk ratings are subject to independent review. Commercial borrowers with ratings between 1 and 5 are considered Pass credits, with 1 being most acceptable and 5 being just above the minimum level of acceptance. Commercial borrowers rated 6 have potential weaknesses which may jeopardize repayment ability. Borrowers rated 7 have a well-defined weakness or weaknesses such as the inability to demonstrate significant cash flow for debt service based on analysis of the company’s financial information. These loans remain on accrual status provided full collection of principal and interest is reasonably expected. Otherwise they are deemed impaired and placed on nonaccrual status. Borrowers rated 8 are the same as 7 rated credits with one exception: collection or liquidation in full is not probable. The following table presents total loans by risk ratings and year of origination. Loans acquired from other previously acquired institutions have been included in the table based upon the actual origination date. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | Amortized Cost Basis by Origination Year | ​ | ​ | ​ | ​ | ​ | ​
As of September 30, 2023 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Revolving | ​ | ​
​ | ​ | 2023 | ​ | 2022 | ​ | 2021 | ​ | 2020 | ​ | 2019 | ​ | Prior | ​ | Revolving | ​ | to Term | ​ | Total
Commercial/industrial | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Grades 1-4 | $ | 61,115 | $ | 139,591 | $ | 67,111 | $ | 60,218 | $ | 11,767 | $ | 23,074 | $ | 101,456 | $ | - | $ | 464,332
Grade 5 | ​ | 5,069 | ​ | 4,649 | ​ | 13,299 | ​ | 4,484 | ​ | 2,652 | ​ | 3,441 | ​ | 21,456 | ​ | - | ​ | 55,050
Grade 6 | ​ | - | ​ | 203 | ​ | 725 | ​ | - | ​ | - | ​ | - | ​ | 921 | ​ | - | ​ | 1,849
Grade 7 | ​ | 39 | ​ | 163 | ​ | 5,887 | ​ | 804 | ​ | 51 | ​ | 1,133 | ​ | 2,598 | ​ | - | ​ | 10,675
Grade 8 | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | -
Total | $ | 66,223 | $ | 144,606 | $ | 87,022 | $ | 65,506 | $ | 14,470 | $ | 27,648 | $ | 126,431 | $ | - | $ | 531,906
Current-period gross charge-offs | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | -
Commercial real estate - owner occupied | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Grades 1-4 | $ | 45,784 | $ | 105,640 | $ | 177,796 | $ | 125,287 | $ | 55,462 | $ | 204,060 | $ | 52,566 | $ | - | $ | 766,595
Grade 5 | ​ | 4,881 | ​ | 18,569 | ​ | 13,968 | ​ | 8,694 | ​ | 7,043 | ​ | 23,604 | ​ | 7,619 | ​ | - | ​ | 84,378
Grade 6 | ​ | - | ​ | 137 | ​ | 1,098 | ​ | 117 | ​ | 965 | ​ | 427 | ​ | 489 | ​ | - | ​ | 3,233
Grade 7 | ​ | 1,589 | ​ | 8,142 | ​ | 3,906 | ​ | 4,127 | ​ | 10,524 | ​ | 13,370 | ​ | 2,277 | ​ | - | ​ | 43,935
Grade 8 | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | -
Total | $ | 52,254 | $ | 132,488 | $ | 196,768 | $ | 138,225 | $ | 73,994 | $ | 241,461 | $ | 62,951 | $ | - | $ | 898,141
Current-period gross charge-offs | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | -
Commercial real estate - non-owner occupied | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Grades 1-4 | $ | 48,018 | $ | 102,690 | $ | 233,310 | $ | 127,811 | $ | 73,184 | $ | 153,717 | $ | 11,382 | $ | - | $ | 750,112
Grade 5 | ​ | 1,042 | ​ | 3,878 | ​ | 13,610 | ​ | 3,720 | ​ | 107 | ​ | 6,125 | ​ | - | ​ | - | ​ | 28,482
Grade 6 | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | -
Grade 7 | ​ | - | ​ | - | ​ | 65 | ​ | 369 | ​ | 5,818 | ​ | 554 | ​ | - | ​ | - | ​ | 6,806
Grade 8 | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | -
Total | $ | 49,060 | $ | 106,568 | $ | 246,985 | $ | 131,900 | $ | 79,109 | $ | 160,396 | $ | 11,382 | $ | - | $ | 785,400
Current-period gross charge-offs | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | -
Construction and development | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Grades 1-4 | $ | 37,716 | $ | 71,328 | $ | 43,618 | $ | 5,250 | $ | 1,872 | $ | 4,203 | $ | 1,207 | $ | - | $ | 165,194
Grade 5 | ​ | 10,313 | ​ | 16,548 | ​ | 3,434 | ​ | 772 | ​ | 26 | ​ | 194 | ​ | 464 | ​ | - | ​ | 31,751
Grade 6 | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | -
Grade 7 | ​ | 10 | ​ | - | ​ | - | ​ | 175 | ​ | - | ​ | 797 | ​ | - | ​ | - | ​ | 982
Grade 8 | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | -
Total | $ | 48,039 | $ | 87,876 | $ | 47,052 | $ | 6,197 | $ | 1,898 | $ | 5,194 | $ | 1,671 | $ | - | $ | 197,927
Current-period gross charge-offs | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | -
Residential 1‑4 family | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Grades 1-4 | $ | 88,804 | $ | 205,155 | $ | 204,165 | $ | 163,959 | $ | 44,299 | $ | 82,398 | $ | 77,274 | $ | - | $ | 866,054
Grade 5 | ​ | 1,535 | ​ | 2,918 | ​ | 767 | ​ | 78 | ​ | 378 | ​ | 2,060 | ​ | 332 | ​ | - | ​ | 8,068
Grade 6 | ​ | 160 | ​ | - | ​ | 83 | ​ | - | ​ | - | ​ | 181 | ​ | 63 | ​ | - | ​ | 487
Grade 7 | ​ | 32 | ​ | 394 | ​ | 35 | ​ | 1,035 | ​ | 102 | ​ | 2,481 | ​ | 172 | ​ | - | ​ | 4,251
Grade 8 | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | -
Total | $ | 90,531 | $ | 208,467 | $ | 205,050 | $ | 165,072 | $ | 44,779 | $ | 87,120 | $ | 77,841 | $ | - | $ | 878,860
Current-period gross charge-offs | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | -
Consumer | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Grades 1-4 | $ | 20,383 | $ | 13,897 | $ | 7,264 | $ | 5,157 | $ | 1,434 | $ | 1,360 | $ | 1,017 | $ | - | $ | 50,512
Grade 5 | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | -
Grade 6 | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | -
Grade 7 | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | 15 | ​ | - | ​ | - | ​ | 15
Grade 8 | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | -
Total | $ | 20,383 | $ | 13,897 | $ | 7,264 | $ | 5,157 | $ | 1,434 | $ | 1,375 | $ | 1,017 | $ | - | $ | 50,527
Current-period gross charge-offs | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 1 | $ | - | $ | 1
Other | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Grades 1-4 | $ | 347 | $ | 800 | $ | 581 | $ | 1,199 | $ | 40 | $ | 9,873 | $ | 1,891 | $ | - | $ | 14,731
Grade 5 | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | 90 | ​ | - | ​ | 90
Grade 6 | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | -
Grade 7 | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | -
Grade 8 | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | - | ​ | -
Total | $ | 347 | $ | 800 | $ | 581 | $ | 1,199 | $ | 40 | $ | 9,873 | $ | 1,981 | $ | - | $ | 14,821
Current-period gross charge-offs | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 69 | $ | - | $ | 69
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total Loans | $ | 326,837 | $ | 694,702 | $ | 790,722 | $ | 513,256 | $ | 215,724 | $ | 533,067 | $ | 283,274 | $ | - | $ | 3,357,582
​ ​ The breakdown of loans by risk rating as of December 31, 2022 is as follows:
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Pass (1-5) |  | 6 |  | 7 |  | 8 |  | Total
Commercial/industrial | ​ | $ | 474,586 | ​ | $ | 3,708 | ​ | $ | 14,156 | ​ | $ | — | ​ | $ | 492,450
Commercial real estate - owner occupied | ​ |  | 665,986 | ​ |  | 8,031 | ​ |  | 42,946 | ​ |  | — | ​ |  | 716,963
Commercial real estate - non-owner occupied | ​ |  | 677,303 | ​ |  | — | ​ |  | 4,317 | ​ |  | — | ​ |  | 681,620
Construction and development | ​ |  | 198,581 | ​ |  | — | ​ |  | 1,127 | ​ |  | — | ​ |  | 199,708
Residential 1‑4 family | ​ |  | 736,146 | ​ |  | 151 | ​ |  | 3,217 | ​ |  | — | ​ |  | 739,514
Consumer | ​ |  | 44,961 | ​ |  | — | ​ |  | 2 | ​ |  | — | ​ |  | 44,963
Other | ​ |  | 18,760 | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 18,760
​ | ​ | $ | 2,816,323 | ​ | $ | 11,890 | ​ | $ | 65,765 | ​ | $ | — | ​ | $ | 2,893,978
​ On January 1, 2023, the Company adopted ASU 2022-02, which eliminated the accounting guidance for TDRs by creditors and enhanced the disclosure requirements for certain loan modifications to borrowers experiencing financial difficulty. Loans that were both experiencing financial difficulty and were modified during the nine months ended September 30, 2023, were insignificant to these consolidated financial statements. The Company also had no new TDRs during the nine months ended September 30, 2022. ​ The following tables present loans acquired with deteriorated credit quality and the change in the accretable and non-accretable components of the related discounts prior to the adoption of ASU 2016-13. ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, 2022
​ | ​ | ​ | ​ | ​ | Unpaid
​ | ​ | Recorded | ​ | Principal
​ |  | Investment |  | Balance
Commercial & Industrial | ​ | $ | 712 | ​ | $ | 1,091
Commercial real estate - owner occupied | ​ |  | 2,539 | ​ |  | 2,843
Commercial real estate - non-owner occupied | ​ |  | — | ​ |  | —
Construction and development | ​ |  | — | ​ |  | —
Residential 1‑4 family | ​ |  | 824 | ​ |  | 1,045
Consumer | ​ |  | — | ​ |  | —
Other | ​ |  | — | ​ |  | —
​ | ​ | $ | 4,075 | ​ | $ | 4,979
​ ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, 2022 | ​ | December 31, 2022
​ | ​ | Accretable | ​ | Non-accretable | ​ | Accretable | ​ | Non-accretable
​ |  | discount |  | discount |  | discount |  | discount
Balance at beginning of period | ​ | $ | 813 | ​ | $ | 149 | ​ | $ | 813 | ​ | $ | 149
Acquired balance, net | ​ |  | 292 | ​ |  | 211 | ​ |  | 292 | ​ |  | 211
Reclassifications between accretable and non-accretable | ​ |  | 61 | ​ |  | (61) | ​ |  | 135 | ​ |  | (135)
Accretion to loan interest income | ​ |  | (476) | ​ |  | — | ​ |  | (561) | ​ |  | —
Balance at end of period | ​ | $ | 690 | ​ | $ | 299 | ​ | $ | 679 | ​ | $ | 225
​

X
- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 310 -SubTopic 10 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//310-10/tableOfContent + Details
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